Green entrepreneurial orientation and sustainable performance of MSMEs: the role of circular economy and digital capability

PURPOSE: This study examines the interplay between stakeholder pressure (internal and external), circular economy (CE) practices, firm size, and their impact on the sustainability and economic performance of Small and Medium sized Enterprises. This research underscores firm size as a key moderator in the relationship between stakeholder pressures and CE adoption, aiming to provide a comprehensive understanding of this dynamic in SMEs. METHODOLOGY: Based on a cross-sectional survey of 124 SMEs in Estonia, Latvia, and Lithuania, with respondents primarily being owners and managers of firms, a three-step approach tested the proposed model for CE practices. First, Confirmatory Factor Analysis (CFA) was used to ensure that the observed variables represented latent constructs. Second, Ordinary Least Squares (OLS) and Weighted Least Squares (WLS) regression methods were used to control for factors influencing CE adoption. Finally, the interaction terms assessed the moderating role of firm size. FINDINGS: The research shows that firm size moderates these effects, with external stakeholder pressure significantly influencing CE adoption more than internal pressure. These finding underscores how firm size shapes SMEs’ responses to stakeholder pressure when adopting CE practices. IMPLICATIONS: This study provides empirical evidence that stakeholder pressure significantly influences SMEs in the Baltic States to adopt CE practices, thus impacting economic and sustainability performance. Smaller firms can enhance CE practices by strategically managing stakeholders, whereas larger SMEs should align with external stakeholder expectations for more effective CE initiatives, leading to improved organizational performance. ORIGINALITY AND VALUE: This study demonstrates how stakeholder pressures drive CE practices and impact organizational sustainability and economic performance. Firm size plays a crucial role as a moderator amplifying the influence of external stakeholder pressure on CE practices.

PurposeFresh and short food supply chains in grocery quick commerce (q-grocery FSFSCs), while valued for swift delivery, face challenges in sustainability, resource efficiency and scalability. This study aims to redesign the last mile of q-grocery FSFSCs by identifying and validating a framework of applicable circular economy (CE) practices. Furthermore, the study assesses the impact of these practices across various sustainability dimensions to understand their level of contribution to sustainable livelihoods and supply chain resilience.Design/methodology/approachThe study employs a multi-phase approach. First, an integrative literature review identifies CE practices and strategies. Second, a survey gathers data on the relationship between these practices and strategies and their impact on sustainability. Third, the framework is validated using the partial least squares structural equation modeling (PLS-SEM) method in WarpPLS 8.0. Finally, k-means cluster analysis in Tableau 2019.4 groups CE practices based on their impact across five sustainability dimensions: environmental, economic, social, resource efficiency and scalability.FindingsThe study validates a framework and identifies high-impact CE practices, such as waste reduction, sustainable packaging, sustainable sourcing, route optimization, sustainable processes and customer convenience. Medium-impact practices include energy efficiency, sustainable fleet, resale and redistribution and information flow. Low-impact practices cover composting, reverse logistics and appropriate storage.Research limitations/implicationsThe findings assist q-grocery companies to adopt CE practices and strategies that support sustainable livelihoods and strengthen supply chain resilience while offering policymakers guidance to promote circularity.Originality/valueThis study is unique in the exploration of the intersection of quick commerce, FSFSCs and CE principles, providing actionable insights for sustainability in the q-grocery industry.

This study is to identify and evaluate the key factors influencing sustainable performance in Vietnamese manufacturing enterprises. It focuses on analyzing how operational and technological methods affect environmental, social, and economic outcomes both directly and indirectly. Data were gathered from 189 manufacturing professionals across Vietnam using a structured questionnaire. This study employed Partial Least Squares Structural Equation Modeling (PLS-SEM) to test a multi-path conceptual model comprising lean manufacturing (LM), Industry 4.0 technologies adoption (ID4.0), green logistics management (GLM), green supply chain management practices (GSCMP), circular economy practices (CEP), and sustainable performance (SP). The results reveal that LM and ID4.0 positively influence the performance of sustainability both directly and indirectly through GSCMP and CEP. Although CEP is a major mediating factor, GSCMP is the most powerful driver. In contrast, GLM had a favorable indirect impact through CEP but there was no direct impact on SP. These findings provide actionable insights for managers and policymakers by highlighting the need for integrated strategies that align lean and digital capabilities with green and circular practices. Through the empirical validation of the RBV-TBL integration and identification of the mediating processes of CEP and GSCMP in the context of a growing economy, this work adds to the framework of knowledge on sustainability.

Purpose Grounded on the natural resource-based view (NRBV) theory, this study aims to analyze the impact of five green strategies – environmental regulations, corporate environmental ethics, green dynamic capability, top management support and green intellectual capital, on green innovation and its impact on sustainability performance of manufacturing firms in Egypt; in addition, the mediating role of circular economy practices on the relationship between green innovations and firms’ sustainability performance was assessed. Design/methodology/approach The data were collected from 394 responses from Egyptian manufacturing firms by using purposive sampling method. Partial least squares structural equation modeling (PLS-SEM) was mainly employed to analyze the data. Findings The study finds that environmental regulations, corporate environmental ethics, green dynamic capabilities and top management support significantly enhance green innovations of Egyptian manufacturing firms, while green intellectual capital is found insignificant. The relationship between green innovations and sustainability is found to be positive. The results reveal that circular economy practices partially mediate the relationship between green innovations and sustainable practices in Egyptian manufacturing firms. Practical implications To ensure sustainable business performance in Egypt, a long-term strategy focusing on green innovations is essential. The government should enforce strict regulations, while firms adopt sustainable practices, support managers and train young employees to drive green supply chain innovations and enhance business performance. Originality/value This study focuses on manufacturing firms, exploring the impact of green business processes on green innovation and sustainability performance. It uniquely examines the mediation role of the circular economy and provides insights applicable to developing countries like Egypt.

Purpose While digitalization is acknowledged as a key driver of organizational transformation, its specific role in advancing sustainability outcomes in resource-constrained firms is less understood. This study, grounded in dynamic capabilities theory (DCT), aims to investigate how digital platform integration and reconfiguration jointly affect green transition (GT), circular economy (CE) practices and sustainable performance (SP) in Vietnamese small and medium-sized enterprises. Design/methodology/approach Based on data collected from 286 Vietnamese firms, linear, polynomial regression and response surface analysis are employed to test the hypotheses. Findings The results show that both integration and reconfiguration capabilities positively influence GT, CE practices and SP, with the strongest effects arising from their balanced development. Misalignment between these capabilities weakens SP. Additionally, GT and CE practices mediate the link between digital platform capabilities and sustainability, indicating that digital transformation enhances sustainability chiefly through environmental and circular initiatives. Practical implications Practical insights are offered for managers and policymakers seeking to promote digitally enabled sustainability in emerging economies. Originality/value This study advances DCT by showing the nonlinear, configuration-dependent effects of digital platform capabilities on sustainability. It frames balanced integration and reconfiguration as a higher-order capability driving environmental and circular performance, offering new insights into digital transformation in emerging economies.

Purpose This research aims to explore the impacts of Industry 4.0 technologies (I4.0Ts) on sustainable supply chain performance (SSCP) in the Iraqi manufacturing industry. It explores the mediating impact of circular economy practices (CEP) and supply chain resilience (SCR) and the moderating impacts of environmental dynamism (ED) and supply chain integration (SCI). Design/methodology/approach A quantitative research design was used, and 426 respondents from Iraqi manufacturing companies were surveyed. The data were analyzed with SmartPLS 4 for the partial least squares-structural equation modeling (PLS-SEM) approach – to assess the measurement model and determine the relevancy of the hypotheses that were embedded in the input model. Findings The findings specify that I4.0Ts have a significant positive influence on SSCP, CEP and SCR. Besides, together SCR and CEP significantly mediate the correlation between I4.0Ts and SSCP. Additionally, ED positively moderates the effects of I4.0Ts on SCR and CEP, while SCI improves the effect of SCR and CEP on SSCP. These results demonstrate that digital technologies yield stronger sustainability outcomes when combined with organizational capabilities such as resilience, circularity and integration. Originality/value Theoretically, the study extends the natural resource-based view theory by incorporating digital transformation and contextual moderators into SSCP frameworks. Practically, the findings offer actionable guidance for manufacturing executives and policymakers aiming to improve sustainability through digital adoption, circularity and resilience.

Despite increasing investments in digital transformation and sustainability initiatives, many organizations struggle to translate these efforts into measurable sustainable organizational performance, particularly in emerging economies, where resource constraints and institutional pressures persist. This study examines how digital capability and environmental strategy orientation contribute to sustainable organizational performance through the sequential mediating roles of environmental management accounting (EMA) integration and managerial decision quality. Drawing on dynamic capability theory and the natural resource-based view, this study proposes a moderated mediation model incorporating technology readiness and environmental regulatory pressure. Data were collected from 479 middle- and senior-level managers of ISO 14001-certified manufacturing firms in Pakistan and analyzed using partial least squares structural equation modeling (PLS-SEM). The results indicate that both digital capability and environmental strategy orientation significantly enhance EMA integration, which in turn improves managerial decision quality and ultimately drives sustainable organizational performance. The findings confirm the presence of sequential mediation through EMA integration and decision quality. Furthermore, technology readiness strengthens the relationship between digital capability and EMA integration, whereas environmental regulatory pressure does not significantly moderate the relationship between environmental strategy orientation and EMA integration. This study contributes to the sustainability literature by introducing a novel sequential mediation mechanism linking digital and strategic capabilities to sustainability outcomes through accounting-based processes. It also provides empirical evidence offering practical insights for managers and policymakers aiming to enhance sustainability performance. The findings provide context-specific insights from an emerging economy and contribute to advancing organizational sustainability in line with SDGs 8, 12, and 13.

This study examines the integrated impact of low‐carbon management practices (LCMPs), Industry 4.0 (I4.0), and circular economy practices (CEPs) on the triple bottom line of manufacturing firms. A conceptual framework incorporating both direct and indirect relationships is developed and theoretically grounded in the resource‐based view (RBV) and dynamic capabilities theory (DCT). Data were collected using a structured online survey administered to senior managers in production, procurement, operations, logistics, and supply chain functions, resulting in 286 valid responses. The hypothesized relationships were empirically tested using Partial Least Squares Structural Equation Modeling (PLS‐SEM). The results indicate that I4.0 technologies have a strong and significant positive effect on LCMPs, which subsequently enhance economic and social performance. CEPs are found to directly and positively influence environmental, economic, and social performance. However, the direct relationship between I4.0 and CEPs is not statistically significant, and CEPs do not mediate the relationship between I4.0 and sustainability outcomes. Further the findings highlight LCMPs as a critical mechanism through which digital transformation translates into sustainability performance, while revealing limited integration between I4.0 and circular economy initiatives. This study contributes theoretically to sustainability literature and provides practical guidance for managers seeking to align digital transformation with low‐carbon and circular strategies.

Circular economy (CE) practices have become a central issue in management and entrepreneurship research, particularly in emerging economies where micro and small enterprises (MSEs) dominate the business landscape. This study explores how green transformational leadership impacts financial performance through the mediation of corporate entrepreneurship practices, while also examining the moderating role of environmental uncertainty. Data was collected using a two-phase, time-lagged survey design involving 353 Indonesian MSEs. Partial least squares structural equation modeling (PLS-SEM) was employed to test the model. The analysis reveals that GTL has a significant positive effect on CE practices ( β = 0.37, p < 0.01) and CE practices strongly enhance financial performance ( β = 0.44, p < 0.01). The findings also confirm that CE practices mediate the relationship between green transformational leadership and financial performance ( β = 0.16, p < 0.01). Moreover, environmental uncertainty was found to significantly weaken the positive relationship between GTL and CE practices ( β = −0.21, p < 0.01). However, it did not have a significant moderating effect on the CE practices-financial performance relationship. This study offers valuable insights for MSE owners and policymakers in emerging Asian economies on leveraging leadership strategies to balance sustainability and financial goals.

Purpose The benefits of circular economy (CE) practices to firms cannot be overemphasised in business environments and have thus attracted research attention lately. Nevertheless, there exist considerable unexplored gaps regarding how green human resource management (GHRM) and organisational citizenship behaviour (OCB) partially or jointly influence the relationship between CE practices and firm performance (FP) in developing economies. Design/methodology/approach Using planned behaviour and natural resource-based view (NRBV) theories, this study explores the roles of GHRM and OCB in the relationship between CE practices and FP [i.e. environmental performance (EP) and financial performance (FnP)]. The study employed a quantitative (survey) approach and specifically using partial least squares-structural equation modelling (PLS-SEM) technique to analyse data randomly collected from 196 manufacturing firms in Ghana. Findings The study found that GHRM moderates the relationships between CE practices and OCB. Additionally, OCB mediates the relationship between CE practices and EP but does not mediate the relationship between CE practices and FnP. Originality/value The study provides empirical evidence and highlights the significance of GRHM and OCB in driving successful CE initiatives in organisations, leading to better FP. The findings of this study provide useful insights to support green operations in firms and policy development, particularly in developing economy environments.

Interorganizational collaboration and the use of new digital technologies, such as artificial intelligence (AI), big data analytics, internet of things (IoT), or blockchain technology, are regarded as key enablers in implementing sustainability and circular economy‐oriented practices. While this is reflected in a few conceptual and case studies, statistical analyses on the topic are rare. No study so far has focused on collaboration, and digital technologies have only been studied in isolation. Therefore, the purpose of this study is to investigate the effect of interorganizational collaboration practices on a firm's circular economy practices and on outcomes (sustainability performance and economic performance), as well as the potentially facilitative role of new digital technologies on both. The research is based on a deductive approach, using a random sample of 112 Austrian manufacturing companies. The study employs partial least squares structural equation modeling (PLS‐SEM), features a multiple‐respondent design, and uses the dynamic capabilities view as a theoretical foundation. The study finds that interorganizational collaboration practices have a strong positive effect on the implementation of sustainability and CE practices, while the use of new digital technologies and general dynamic capabilities do not. The use of digital technologies positively affects only interorganizational collaboration, while general dynamic capabilities serve as an antecedent for both the use of digital technologies and interorganizational collaboration. Regarding the outcomes of CE implementation, the study finds a positive impact on firm‐level sustainability and economic performance. From a theoretical point of view, the study provides a new perspective on the prerequisites for successful CE implementation, highlights the importance of collaboration, and contextualizes the role of new digital technologies and dynamic capabilities. From a practical point of view, based on the positive outcomes found, the study supports arguments in favor of company engagement in CE activity. It also serves to motivate purposive digitization and systems thinking in order to create efficient CE collaboration networks.

The impact of competitive strategy on corporate sustainability and the role of circular economy (CE) practices remains scanty in the extant literature. This study therefore examines the mediating role of CE practices on the relationship between competitive strategy and sustainability performance. Drawing on the natural resource‐based view (NRBV) theory and institutional logics (IL) theory, this study explores a framework that introduces competitive strategy as an antecedent variable in advancing CE practices and sustainability performance among firms in a developing economy. Using data obtained through a survey of 380 firms in Ghana, the results revealed that competitive strategy has a positive and statistically significant relationship with corporate sustainability performance. Additionally, CE practices mediate the positive association between competitive strategy and corporate sustainability. Our research extends the frontiers of the literature by combining the IL and NRBV theories to explain how competitive strategy influences sustainability performance via CE practices.

Sustainability has been widely recognized as a pervasive phenomenon that underlies the operations and performance of businesses. Recent research has examined the effect of green logistics management on the sustainability performance of businesses. However, we contend that the relationship between green logistics management and the sustainability performance of firms is not direct but mediated through circular economy practices. We analyze the direct and indirect effects of green logistics management on business sustainability performance via circular economy practices, using the natural resource-based view and resource dependence theory as our theoretical underpinnings. This study also assesses the moderating effect of supply chain traceability on the associations. Drawing upon the empirical data from 211 Bangladeshi manufacturing SMEs, we performed the PLS-SEM technique to assess the hypotheses. The findings show that green logistics management positively affects organizations’ circular economy practices and sustainability performance. Furthermore, supply chain traceability strongly affects SMEs’ circular economy practice but fails to moderate the linkage between green logistics and sustainability performance. Finally, circular economy practice mediates the linkage between SMEs’ green logistics management and sustainability performance. We also conducted the Sobel test to validate the mediation. Our findings advance the natural resource-based view and resource dependence theory while improving the understanding of green logistics management, circular economy practices, and sustainability performance. Given the dearth of literature assessing the complex interactions among these variables, our findings have pivotal implications.

Purpose This study aims to investigate how Industry 4.0 technologies, artificial intelligence (AI)-based supply chain analytics and circular economy practices jointly influence sustainable supply chain performance, with net-zero supply chain as a mediating mechanism. It also examines the moderating roles of supply chain ambidexterity and environmental dynamism in this relationship. Design/methodology/approach Grounded in the dynamic capabilities theory and the natural resource-based view, a moderated mediation model was developed and tested using survey data from 420 managers in Iraq’s manufacturing sector. Partial least squares structural equation modeling was used to validate the model and test hypotheses. Findings The results reveal that Industry 4.0 technologies positively influence sustainable supply chain performance both directly and indirectly through the sequential mediating roles of AI-based supply chain analytics, circular economy practices and net-zero supply chain. While AI-based supply chain analytics have no direct impact on net-zero supply chain, their mediating and interaction effects are significant. Supply chain ambidexterity enhances the influence of Industry 4.0 technologies on AI-based supply chain analytics, and environmental dynamism strengthens the relationship between AI-based supply chain analytics and net-zero supply chain. These results confirm that digital and circular capabilities, when integrated and supported by organizational and environmental factors, can significantly enhance sustainability outcomes. Practical implications This study provides managers with a strategic roadmap for deploying AI, Industry 4.0 technologies and circular initiatives to achieve net-zero goals and improve supply chain sustainability. Emphasis is placed on investing in analytics, fostering ambidexterity and adapting to environmental uncertainty. Originality/value This is among the first studies, to the best of the authors’ knowledge, to empirically test a comprehensive moderated mediation model linking Industry 4.0 technologies, AI, circularity and net-zero strategies to sustainability performance in an emerging economy context.

Amid rising environmental concerns, Industry 4.0 and blockchain technology (BCT) are transforming circular economy (CE) practices and prevailing business models. Recognize the same; this study examines the role of blockchain technology in circular CE practices and their impact on eco‐environmental performance, which influences organizational performance. The study collects data from 404 enterprises located in Chinese and Pakistani territories, involved in cross‐border supply chain operations. Both countries' sample has great relevance due to the China Pakistan Economic Corridor (CPEC), which possesses several positive fallouts in terms of technology spillovers across firms. Using the partial least squares structural equation modeling (PLS‐SEM) modeling framework, this study provides three key findings. First, BCT significantly improves the circular economy practices (circular procurement, circular design, recycling, and remanufacturing). Second, CE practices help improve firms' environmental performance and stimulate their financial performance. Third, higher eco‐environmental performance significantly boosts organizational performance. This study sets out the foundations for participating countries/firms that simultaneously achieve financial and sustainable goals by integrating blockchain technology in circular economy practices.